Russia’s new gas exchange could lead to energy pricing outside the dollar

by yeah stub

On Oct. 24, Russia launched a new and independent natural gas exchange that will reside in St. Petersburg, and will make the facility the largest market for natural gas trading in all of Europe. Known as the St. Petersburg International Mercantile Exchange (SPIMEX), this trade facility will allow for international and domestic gas operations to sell their products in Russia and in a centralized location, and will become part of the growing Eurasian Economic Zone that is emerging in the East as global trade moves away from the dollar and away from U.S. hegemony.

The importance of this independent market exchange is that natural gas can work towards a complete separation from oil, which under the current system tends to price both commodities on similar scales and in dollar denominations. It will also open up the market for new buyers who are solely interested in natural gas, and help facilitate a new pricing structure that will allow Russia and other gas producers to eventually remove the energy source from the petro-dollar and from U.S. control over the monetary component in gas trading.

Russia, the world’s second-largest producer of natural gas, has launched its first auction of natural gas on Friday at the St. Petersburg International Mercantile Exchange (SPIMEX). It will be Europe’s largest natural gas trading post.

The project is intended to create a more competitive market for natural gas prices, which at present are more-or-less tied to oil. Now, independent producers will have access to a broader range of buyers.

The exchange will facilitate up to 35 billion cubic meters of gas annually, with Gazprom, Russia’s largest producer, maintaining the right to sell a half of that, and independent producers the remaining 17.5 billion cubic meters. – RT

It is interesting to note that the SPIMEX is beginning operations just two days after the tragic and highly suspect death of Total CEO Christophe de Margerie, who was in Russia to discuss energy topics with government and oil industry leaders. And with de Margerie being a staunch advocate of taking oil and energy off the antiquated petro-dollar system, it is very likely Total will be intrinsically involved in this new exchange.

With economic sanctions, and secret oil deals with Middle Eastern producers causing dire financial consequences to Russia’s currency and energy industries, the best way to circumvent external attacks is to simply bypass the recognized market structures and create your own platforms of trade, and in currencies that are beneficial to the well being of your economy. And while it may take some time before natural gas is completely segregated from oil and the petro-dollar, the introduction of the largest natural gas exchange in Europe will eventually allow Russia to establish price discovery for the commodity, and change the way customers are allowed to purchase this crucial form of energy for their natons and industries.